Thursday, February 25, 2010

The intention of the market remains uncertain after today's price action. The 1 minute chart above suggests a wave [ii] top followed by initial waves within wave (i) of [iii] as well as an alternate in which wave iv of (c) of [ii] bottomed today. Because wave iv and wave (c) of [ii] would be getting quite wide and complex if [ii] has not completed, in my estimation wave [ii] already topped. But because of the massive retracement of the gap down today, it could go either way. The Dow Jones Industrial Average had a less powerful rally, about 69% of the decline that began yesterday was retraced.

A 10 minute chart is above.

Other less desirable alternates include a rare possibly completed downward expanding leading diagonal 1st wave from this week's top and a completing impulse wave higher that began 2/5 (perhaps a large 'c' wave of a second wave flat). The 'c' wave of a second wave flat higher that began 2/23 may also be completing tomorrow but this seems unlikely as well.

All counts seem unlikely to some degree. In any case, the rally seen today should be followed by a pullback shortly after trading begins tomorrow. Today's gap may be filled first however. Whether this pullback develops into a more bearish picture should be determined tomorrow.

The intention of the market remains uncertain after today's price action. The 1 minute chart above suggests a wave [ii] top followed by initial waves within wave (i) of [iii] as well as an alternate in which wave iv of (c) of [ii] bottomed today. Because wave iv and wave (c) of [ii] would be getting quite wide and complex if [ii] has not completed, in my estimation wave [ii] already topped. But because of the massive retracement of the gap down today, it could go either way. The Dow Jones Industrial Average had a less powerful rally, about 69% of the decline that began yesterday was retraced.

A 10 minute chart is above.

Other less desirable alternates include a rare possibly completed downward expanding leading diagonal 1st wave from this week's top and a completing impulse wave higher that began 2/5 (perhaps a large 'c' wave of a second wave flat). The 'c' wave of a second wave flat higher that began 2/23 may also be completing tomorrow but this seems unlikely as well.

All counts seem unlikely to some degree. In any case, the rally seen today should be followed by a pullback shortly after trading begins tomorrow. Today's gap may be filled first however. Whether this pullback develops into a more bearish picture should be determined tomorrow.

My trading philosophy is 95% based on my own Elliott Wave analysis of the S&P 500. I try to keep my analysis and trading as simple as possible and do not use trend lines, channels, or definite retracement, price, or time targets. To me, inspecting the proportionality and symmetry of a market's price structure is the key to mastering the principle; it is through this that low-risk, high-reward trading opportunities are found.

Because they are the only things I look at when trading, the quality of the charts I post on this blog are very important to me. I think you will find my work to be the best Elliott Wave analysis of the S&P 500 on the internet.